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AT&T and prepaid wireless provider Leap Wireless International Inc. have entered into an agreement for AT&T to acquire Leap for $15 per share in cash.

Under the agreement, AT&T will acquire all of Leap's stock and wireless properties, including licenses, network assets, retail stores and approximately 5 million subscribers. As of April 15, 2013, Leap had $2.8 billion of net debt. Leap shareholders will also receive a contingent right entitling them to the net proceeds received on the sale of Leap's 700 Mhz "A Block" spectrum in Chicago, which Leap purchased for $204 million in August 2012.

Leap's network covers approximately 96 million people in 35 U.S. states. Leap currently operates -- under the Cricket brand -- a 3G CDMA network, as well as a 4G LTE network covering 21 million people in these areas, and has 3,400 employees.

"The result will be increased competition, better device choices, improved customer care and a significantly enhanced mobile Internet experience for consumers seeking low-cost prepaid wireless plans," according to AT&T.

The combined company will have the financial resources, scale and spectrum to better compete with other major national providers for those interested in low-cost prepaid service.

The acquisition includes spectrum in the PCS and AWS bands covering 137 million people and is largely complementary to AT&T's existing spectrum licenses. Immediately after approval of the transaction, AT&T plans to put Leap's unutilized spectrum - which covers 41 million people - to use in furthering its 4G LTE deployment.

Two years ago, AT&T struck a deal to buy T-Mobile USA for $39 billion, but U.S. regulators blocked the attempt by the No. 2 and No. 4 U.S. wireless carriers to merge.

The latest transaction is subject to review by the Federal Communications Commission and the Department of Justice and to other customary closing conditions. AT&T expects the transaction to close in six to nine months.